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The world's largest maker of computer security software forecast higher sales than some analysts predicted as companies increased IT spending
By Aaron Ricadela
(Adds comment by analyst in fourth paragraph, CEO in 10th.)
(Bloomberg)?Symantec Corp., the world's largest maker of computer security software, forecast higher sales than some analysts predicted as companies increased spending on information technology.
Revenue in the period ending Dec. 31 will be $1.57 billion to $1.59 billion, Symantec said today in a statement. Analysts projected $1.55 billion. Third-quarter profit excluding certain costs will be 32 cents to 33 cents a share, compared with the 32-cent average of estimates compiled by Bloomberg.
Sales of security and backup software to businesses are recovering from earlier in the year, when companies tightened their information-technology budgets amid a slow economic recovery. Mountain View, California-based Symantec, which gets about 30 percent of its revenue from Europe, benefited last quarter as the euro increased in value against the dollar.
"It wasn't an opinion-changer for me, but it was a nice bounce-back from June," said Walter Pritchard, an analyst at Citigroup Inc. who has a "hold" rating on the shares and doesn't own them. "They have had inconsistent execution. It was a good quarter after a bad quarter, and it's not clear that it's a sustainable trend."
Symantec gained 5.9 percent to $16.73 in late trading after dropping 9 cents to $15.80 at 4 p.m. New York time on the Nasdaq Stock Market. The shares have fallen 12 percent this year through the Nasdaq close.
Net income in the second quarter fell to $136 million, or 17 cents a share, from $155 million, or 19 cents, a year earlier. Revenue increased to $1.48 billion.
Profit excluding some items rose to 34 cents a share, compared with the 28-cent average of estimates.
Data Centers
Symantec has tried to gain a bigger foothold in corporate data centers with mixed success. In 2005, it paid $10.2 billion for storage company Veritas Software Corp., a deal that rankled some investors. Symantec has made 21 acquisitions since then.
Under Enrique Salem, who has been chief executive officer since April 2009, Symantec has been grappling with sluggish demand in its storage business and competition from McAfee Inc. in the corporate security market. In August, Intel Corp. agreed to acquire McAfee for $7.68 billion.
More closely integrating security software and computer chips can speed encryption of data, Salem said in an interview. It won't be as effective helping companies defend computer-controlled industrial equipment from new types of malicious software attacks such as the Stuxnet program that affects machines sold by Munich-based Siemens AG, he said.
"The cyber threat environment is getting more toxic," he said.
Ricadela is a technology editor for Bloomberg Businessweek.com in San Francisco.
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By Aaron Ricadela
(Adds comment by analyst in fourth paragraph, CEO in 10th.)
(Bloomberg)?Symantec Corp., the world's largest maker of computer security software, forecast higher sales than some analysts predicted as companies increased spending on information technology.
Revenue in the period ending Dec. 31 will be $1.57 billion to $1.59 billion, Symantec said today in a statement. Analysts projected $1.55 billion. Third-quarter profit excluding certain costs will be 32 cents to 33 cents a share, compared with the 32-cent average of estimates compiled by Bloomberg.
Sales of security and backup software to businesses are recovering from earlier in the year, when companies tightened their information-technology budgets amid a slow economic recovery. Mountain View, California-based Symantec, which gets about 30 percent of its revenue from Europe, benefited last quarter as the euro increased in value against the dollar.
"It wasn't an opinion-changer for me, but it was a nice bounce-back from June," said Walter Pritchard, an analyst at Citigroup Inc. who has a "hold" rating on the shares and doesn't own them. "They have had inconsistent execution. It was a good quarter after a bad quarter, and it's not clear that it's a sustainable trend."
Symantec gained 5.9 percent to $16.73 in late trading after dropping 9 cents to $15.80 at 4 p.m. New York time on the Nasdaq Stock Market. The shares have fallen 12 percent this year through the Nasdaq close.
Net income in the second quarter fell to $136 million, or 17 cents a share, from $155 million, or 19 cents, a year earlier. Revenue increased to $1.48 billion.
Profit excluding some items rose to 34 cents a share, compared with the 28-cent average of estimates.
Data Centers
Symantec has tried to gain a bigger foothold in corporate data centers with mixed success. In 2005, it paid $10.2 billion for storage company Veritas Software Corp., a deal that rankled some investors. Symantec has made 21 acquisitions since then.
Under Enrique Salem, who has been chief executive officer since April 2009, Symantec has been grappling with sluggish demand in its storage business and competition from McAfee Inc. in the corporate security market. In August, Intel Corp. agreed to acquire McAfee for $7.68 billion.
More closely integrating security software and computer chips can speed encryption of data, Salem said in an interview. It won't be as effective helping companies defend computer-controlled industrial equipment from new types of malicious software attacks such as the Stuxnet program that affects machines sold by Munich-based Siemens AG, he said.
"The cyber threat environment is getting more toxic," he said.
Ricadela is a technology editor for Bloomberg Businessweek.com in San Francisco.
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